Railroad Sustainability Symposium Highlights Environmental Opportunities For Rail Sector

While most of EDF’s freight transportation clean air efforts address emissions from the trucking and ocean sector, use of our nation’s railroad system for intermodal goods movement has been growing. In fact, the Association of American Railroads (AAR) reportsthat intermodal traffic on U.S. rail has risen from 6 million units in 1990 to nearly 12 million in 2011.

As rail lines come to view intermodal as a growth sector and revenue generator, there are significant opportunities to ensure that freight transportation remains on a path toward sustainability. In that context, Norfolk Southern and GE Transportation hosted the 2nd Annual Railroad Sustainability Symposium last week to highlight current sustainability practices in the sector and to create a dialogue about how sustainability impacts railroads, freight transportation and supply chain logistics.

The symposium covered a wide range of topics including new locomotive technology, sustainability measurement, and land restoration efforts. Perhaps most relevant to clean air issues in environmental hotspots was an update on the NS 999, an electric switcher locomotive prototype first rolled out in 2009 by Norfolk Southern. This locomotive was designed with the express purpose of serving rail yards, an area with high traffic density and idling rates, as well as harmful emissions.

The NS 999 emits no pollutants from combustion and would be most impactful in reducing harmful criteria pollutants which threaten public health. Efforts to continue testing and developing the locomotive are ongoing, but the NS 999 represents a significant effort to address emissions at some of the most critical junctures of the supply chain.

Also of particular interest was the discussion on metrics and calculations for sustainability efforts. A number of companies represented at the symposium are a part of the Carbon Disclosure Project and/or the Dow Jones Sustainability Index. Many spoke of the need for accountability of emissions estimations and third-party verification of data that feeds into sustainability and emissions modeling.

The AAR showcased their carbon calculator, a popular tool also used by other transportation stakeholders like the Port of Seattle. These calculators estimate the amount of carbon dioxide emissions avoided by using a particular route or mode. Companies, shareholders, regulators and other interest groups continue to push for transparency in sustainability to allow consumers and suppliers of transportation services to measure their impact and achievements in this area.

The symposium was informative and the dialogue collaborative as representatives from the rail industry, shippers, logistics partners and others met to advance the sustainability agenda for railroads. Rail is a growing player in the intermodal market and new infrastructure developments across the country promise to spur additional growth for this sector.

Houston is recognized as a major rail hub for the region and at the Port of Houston, locomotives represent approximately 13 percent of port nitrogen oxide (NOx) emissions and 8 percent of port particulate matter (PM) emissions according to the 2007 Goods Movement Air Emissions Inventory. As we work towards improving air quality in environmental hotspots and reducing carbon emissions across the supply chain, we look forward to engaging with rail partners on freight sustainability.

This content was originally published on EDF's Texas Clean Air Matters blog.

Three Tools for Consumer Engagement

In an age full of advertising and media overload, it is often difficult to weed through the bad to get to the trustworthy. Showcasing the effort your company put into your sustainable products is probably a big goal for you, but what can you do to stand out on a shelf amidst the sea of green everything?

Consumer demand for environmentally-friendly services and products continues to grow –a recent study shows that a majority of shoppers believe it is important that companies be environmentally-friendly and a third of them are willing to spend more for green products.

Yet this represents only the beginning of a much needed transformation that ought to include sustainable consumption. In fact, a growing number of experts agree that while supply chain and internal operations provide great opportunities for companies to cut costs and reduce environmental impact, they will not lead us to achieve a truly sustainable world without a drastic shift in consumer culture.

Some forward thinking companies—such as Patagonia with its “Do not buy this jacket” ad in the New York Times last Black Friday and its Common Threads Initiative —are recognizing that innovative and effective consumer engagement around the demand side is not only an environmental imperative but also makes great business sense. Notably, it presents great opportunities to strengthen brand image and increase consumer loyalty –attributes that will become increasingly important as consumption selection criteria shifts away products’ low-upfront costs to their overall active life value and efficiency.

Here are three digitally-based tools used to effectively and easily engage with customers on a data-driven basis, while harnessing the power of social media to promote positive behavior reinforcement among consumers:

Carrot Mob leads highly innovative campaigns in which partnering companies pledge to undertake a specific sustainability initiative on the condition that a specified level of sales be reached over a certain time period. After helping organize over 250 successful campaigns with local businesses around the globe, Carrot Mob is now ready to scale up the size and impact of its campaigns, and engage even more consumers to directly “vote with their dollars” for sustainability.

Recyclebank socially and financially incentivizes the mainstream public (4 million members so far) to integrate sustainability into their everyday lives. Recyclebank offers partnered businesses such as Procter & Gamble, General Electric and Unilever a multifaceted media platform from which to publicize their already existing sustainability initiatives in hopes of increasing sales and brand loyalty, among other benefits.

GoodGuide uses publicly available data to rank over 100,000 consumer products in a number of different categories for their overall health, environmental and social impact –making it the largest and most reliable independent product ranking guide. Consumers can use the browser add-on and smartphone barcode-scanning app to help guide their online and in-store purchases. GoodGuide offers partner companies a platform to advertise their sustainability efforts and highly ranked alternative products to those searched, and has now also started offering consumer product companies advice on how to improve their products’ rankings. Retail giants Walmart and Target have recently signed on to have their products ranked.

These are just a few ways for your company to showcase the internal and supply side sustainability efforts you already have in place, as well as help catalyze further change towards sustainable consumption patterns, with transparency at the helm.

Hidden water, growing costs: My summer uncovering potential water savings at AT&T facilities

By: Ravindra Bhandari, 2012 EDF Climate Corps fellow at AT&T, MBA candidate at Babson College

I distinctly remember watching “An Inconvenient Truth” when the documentary was first released. It struck a deep emotional chord in me. I felt an obligation to do something but did not know where to begin.

That changed this summer. As an EDF Climate Corps fellow working with the water and energy sustainability team at AT&T, I finally found a way to translate my passion into action.

When I learned where I would be posted for the summer, I wondered what does AT&T — a telecommunications company — have to do with energy or water management? But then, during the first few days at AT&T’s headquarters in downtown Dallas, Tex., I learned that:

  • AT&T has a substantial real estate footprint made up of thousands of leased and owned facilities
  • These facilities consume a total of 3.4 billion gallons of water every year, equivalent to about 5,150 Olympic-size swimming pools
  • Just 125 of AT&T’s sites – including data centers and large office buildings – are responsible for more than 50 percent of AT&T’s total water use
  • Many of these facilities are located in water-stressed regions of the country

With such a significant impact, AT&T wants to reduce its energy and water footprint for the long-term sustainability of its operations. To tackle this problem, AT&T teamed up with Environmental Defense Fund to find innovative solutions for reducing the overall water consumption at cooling towers, which use a surprising amount of water to keep buildings cool. As an EDF Climate Corps fellow, I had a unique opportunity to engage in this work and help develop our approach for finding significant water, energy and cost savings.

Three-pronged approach

Our approach was to tackle the problem on three fronts:

  1. Technology Evaluation: Identify and track the performance of innovative water treatment technologies that dramatically reduce water use in cooling towers and analyze the possibilities of rolling them out to more sites.
  2. Operational Improvements: Use best practices to engage our facility managers and service providers to increase the number of times we can use our cooling tower water and reduce the amount of water discharged to the sewer.
  3. Maximize the opportunity for free air cooling: Identify sites where free air cooling – bringing cooler outside air in – can be used to reduce the need for mechanical cooling.  Since conventional cooling methods can be energy and water intensive, reducing the load on those systems can drive significant savings.

With our three-pronged approach in hand, we undertook a pilot program to evaluate our strategy and begin building a business case to scale the effort within AT&T.

Implementing the pilots was not always a smooth process, but the bumps we encountered along the way taught us valuable lessons for rolling this out more broadly.  Some of these lessons were:

  • One size does not fit all: Each building is very unique in its characteristics. While some sites are newly updated, others have antiquated infrastructure and Building Management Systems. Recognizing those differences helped us develop unique strategies to address these diverse facility conditions.
  • Competing Priorities: The property managers juggle busy workloads and serve many customers, so adding water and energy efficiency initiatives to their plates can be challenging. Support from company leadership as property managers take on new responsibilities is critical for success.
  • Lack of water treatment expertise: Water treatment for cooling towers can be confusing and complicated. The task is often performed by outside vendors. Increasing the knowledge and expertise of those charged with managing water cooling towers can unlock water savings.
  • One of the benefits of pilot projects is to work out some of these hiccups before the project is scaled. The lessons we’re learning will make AT&T smarter for the next phase of the project.

Sharing the lessons

By working together, AT&T and EDF have the power to spread the knowledge that saving water is not only the right thing to do, but can also lead to significant cost savings throughout the industry. This unique initiative can potentially impact the way companies think about their water usage and lead to billions of gallons of water saved annually.

As I return to school, the pilots will continue to run. I'm inspired and proud to know that AT&T and EDF are pursuing water savings before the well runs dry!

EDF Climate Corps places specially trained MBA and MPA students in companies, cities and universities to develop practical, actionable energy efficiency plans. Sign up to receive emails about EDF Climate Corps, including regular blog posts by our fellows. You can also visit our Facebook page or follow us on Twitter to get regular updates about this project.

Private Equity Firms Realize the Value of Participating in EDF Climate Corps

In recent weeks, the eight EDF Climate Corps fellows who have been embedded at private equity firms and their portfolio companies began giving their final reports to senior management about their efforts to identify strategic opportunities to increase energy efficiency and returns.

We've been impressed at the level of engagement by top leaders at The Carlyle Group (Carlyle) and Clayton Dubilier & Rice (CD&R) in the work of EDF Climate Corps fellows, as well as the receptivity of portfolio companies to boosting return on investment through energy efficiency opportunities.

Today, we want to highlight the work of three fellows, just to give a taste of the kind of projects this energetic and dynamic group is completing. Their experience demonstrates that EDF Climate Corps can be a powerful tool for jumpstarting or energizing an ESG initiative, whether at a private equity firm or one of its portfolio companies.

Developing an ESG effort at a leading private equity firm

CD&R had already been working on developing its ESG program when the firm decided to take on Sarah Stern as an EDF Climate Corps fellow, to prioritize efforts in its portfolio of 16 companies. Stern, an MBA candidate at the Tuck School, developed criteria and metrics for prioritization by looking at management receptivity, the importance of sustainability to clients, geographic location and energy use to select seven companies for further investigation.

She then identified key stakeholders, gathered energy data and identified relevant upcoming capital expenditures. Through data analysis she narrowed the field to three companies, developing a business case for individual energy efficiency investment opportunities based on the best financial and environmental return. Sarah also created a tool – “The CD&R Energy Efficiency Playbook” – to help portfolio company facility managers identify and evaluate energy efficiency projects on their own.

Creating Tools and Strategies for Real Estate Investments

At Carlyle, Cornell University MBA candidate Jennifer Le spent the summer developing an approach aimed at enabling the firm to identify and capitalize on opportunities to create positive financial and environmental outcomes for select real estate assets across its portfolio. Jennifer began by reviewing Carlyle's EcoValuScreen approach within its buyout funds and talking with numerous internal and external experts, gaining an understanding of how to translate this approach to real estate due diligence and asset management. She then developed a framework and implementation guide focused on energy efficiency strategies for Carlyle’s real estate-focused acquisition and asset management teams.

The framework includes benchmarking of property energy usage using software tools, quantifying energy opportunities to build into pro-forma financial models, and incorporating strategies into Management Business Plans and Investment Committee Memoranda. In addition, the program addresses how to both establish appropriate energy performance goals and utilize property management partners to implement, monitor and report results of initiatives.

Based on her analysis of real estate portfolio data, she identified opportunities and developed implementation plans for potential outcomes, ranking projects based on financial and environmental return. At her final presentation last month, we were assured Jennifer’s recommendations would be seriously considered by the presence and engagement of several managing directors of the real estate funds as well as a co-founder. You can read her three recommendations for Carlyle's real estate portfolio elsewhere in her blog.

Meeting Ambitious Carbon Footprint Goals

Syniverse, a Carlyle portfolio company, develops technology that allows mobile phones to text, interconnecting voice and data systems around the world. With sustainability as an important concern to Syniverse clients, the company set ambitious goals for carbon reduction last fall. Fresh from earning an MS from Columbia University, Kevin Lehman tackled the challenge of identifying specific areas for energy efficiency that would reduce consumption by 20 percent from 2010 levels by 2015. Kevin found ways to potentially exceed these goals in the Tampa-based company's 200,000 square foot data center and office space. He also worked with the marketing and media departments to refine messaging around the existing efficiency of Syniverse operations.

His recommendations included server virtualization, cold air containment strategies and upgrades to the computer room air-conditioning units that could yield a 30 percent energy savings. Additionally, a change to the building's operating schedule presented a no-cost opportunity to create significant savings on cooling and lighting.

The bottom line: EDF Climate Corps is a powerful way to get measureable results for investors, companies and the environment. Stay tuned to see the quantifiable outcomes that the entire EDF Climate Corps program created this summer.

EDF Business heads to RILA

While retailers have a significant impact on climate, they also have a significant opportunity to reduce carbon emissions within their business and throughout their supply chain. This is why a team from EDF Business will be attending the Retail Industry Leaders Association (RILA) Sustainability Conference in Phoenix, AZ from September 19-21.

The conference provides an opportunity for EDF to continue engaging with leading retailers in the US. Retailers have been an important part of our corporate partnerships from our early days of working with McDonald’s and our ongoing work with Walmart.

EDF staff members Jason Mathers and Scott Wood will be at the conference to engage with retailers about our freight and supply chain logistics work and our energy efficiency program EDF Climate Corps, for which we’re currently accepting company applications for 2013.

Climate Corps is EDF’s proven summer fellowship program that places specially-trained MBA and MPA students from top-ranking schools in leading organizations to build the business case for energy efficiency. Since the program began in 2008, EDF Climate Corps fellows have found $1 billion in energy savings at their host organizations, enough to avoid 1 million metric tons of CO2 emissions annually.

Here are few recent examples of the cost and energy savings realized by participating retailers:

  • At Target, EDF Climate Corps consulted with the retailer to develop enhancements to Target’s plan to earn the ENERGY STAR for 75 percent of its U.S. buildings and improve energy efficiency in Target stores. These projects have the potential to avoid 50,000 metric tons of CO2 emissions each year and generate several million dollars in annual energy savings.
  • At jcpenney, EDF Climate Corps developed a plan to adapt the existing employee program for energy awareness in its retail stores to fit the culture of its headquarter offices. The plan could potentially save $880,000 by the end of 2015, and curb 6,000 metric tons of CO2 emissions each year.
  • At REI, EDF Climate Corps proposed lighting solutions and equipment upgrades at the company’s distribution center and headquarters that could save $53,000 and 490 metric tons of CO2 emissions each year.

If you’ll be there, stop by our booth in the exhibition hall to learn more about EDF and our work with leading retailers on sustainability.

Environmental Leader: Fund Managers, Investors Increasingly Focus on ESG

Andrew Malk and Zach Goldman are Partners at Malk Sustainability Partners (MSP), a specialty management consultancy that guides investors and businesses to leverage resource and environmental management to maximize profitability.

Many of the most recognized names in the private equity industry are currently leveraging environmental, social, and governance (ESG) tools to create financial value for their investment funds. Looking forward, nearly all of the firms surveyed expect to increase their focus on these concerns.

In fact, many funds, such as TPG Capital, KKR, and Blackstone, have already built systems specifically designed to drive cost savings from eco-efficiency initiatives while navigating an increasingly important set of social and governance considerations.

These are a few of the trends we’ve discovered and shared in ESG in Private Equity. In collaboration with Environmental Defense Fund (EDF), we conducted a survey that provides a unique look into the small yet influential universe of decision makers in the private equity sector. The report is a collection of evolving perspectives on ESG and its impact on value creation.

ESG is a term used to describe a range of investment considerations related to issues such as environmental sustainability, social equity and corporate citizenship. We have seen evidence that the private equity sector is moving rapidly through the evolutionary stages of ESG adoption.  These investors are no longer asking what is ESG or why are these issues important, but how to capitalize on them.

Continue reading on Environmental Leader. The complete study can be accessed here.

This content was originally published on Environmental Leader.

Top Investors Buy In to Environmental Performance

Proactively managing environmental, social and governance (ESG) risks and opportunities can be a powerful lever for value creation.  Since the launch of our Green Returns work in 2008, we’ve worked hard to convince private equity and institutional investors of that.  We’re now seeing the pay off as these issues have climbed up the agenda at leading private equity firms.

Industry leaders are no longer asking why they should focus on ESG, but how to do it. From integrating ESG into the investment process to hiring in-house ESG professionals to measuring and reporting ESG performance, private equity firms are beginning to develop systematic approaches to turning ESG management into a source of competitive advantage and strategy for value creation.

This week, Malk Sustainability Partners (MSP) in collaboration with EDF released an exciting new study that explores why and how private equity firms are increasing their focus on ESG management.

ESG in Private Equity: Perspectives and Best Practices for Managing Environmental, Social and Governance Issues shares insights from 19 private equity firms and institutional investors on the state of the market with regard to ESG issues and highlights the growing set of ESG best management practices that are emerging across the industry.

Over the past few years, we’ve seen a dramatic shift in thinking as investors have learned to view ESG issues not only in terms of downside risks, but as upside opportunities to create value.  As highlighted in Greenbiz.com’s recent coverage of the report, “More than half of the funds in the study have developed (or are developing) an ESG management program to create value,” and over 90 percent expect to increase their attention to the issue in the future. 

The second half of the document explores detailed best-practices related to leadership, due diligence, operations, metrics and communications.

We hope this report will serve both as a useful reference and guide for firms and investors thinking about their own ESG efforts. We look forward to continuing the conversation and collaboration with firms seeking to raise the bar for their industry.

The study is available at www.Malksp.com/ESG-Private-Equity/

Replacing your iPhone? Think again before trashing it

With the unveiling of a new iPhone today, many of us are wondering what to do with the device we bought last year. But old cell phones aren’t the only problem. From Apple laptops to Zenith televisions, 20-50 million tons of electronic products are discarded annually, be they buried in landfills, burned in incinerators or recycled. Ensuring that they’re disposed of properly requires tracking items through the waste stream, which isn’t currently happening.

This problem inspired a recent Eco-Challenge: Working with IT leader EMC and online crowdsourcing portal InnoCentive, Environmental Defense Fund (EDF) asked participants to help develop a scalable process or device that would allow organizations that produce electronic devices to follow the flow of discarded items through the waste stream to final disposal. Nearly 800 “Solvers” considered the problem, and more than 60 solutions were submitted. Three solutions were selected as winners and the Solvers split a $10,000 prize.

"Proper disposal of e-waste has been an ongoing issue for the IT industry with serious environmental and business impacts, such as public health, waste reduction and data security," said Namrita Kapur, and thanks to this contest we’re closer to a practical solution than ever before.

EMC plans to host brainstorming sessions with the winning Solvers to explore the synergies among their ideas, outline a potential proof-of-concept and ideally partner with them to move forward. The ultimate goal is to develop new solutions to improve e-waste tracking industry wide. EMC intends to share the winning ideas with its peers in the industry to help accelerate the adoption of more environmentally sustainable and innovative e-waste practices.

Learn more in our press release.